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#1: Issuance will kick off.....>

GILT AUCTION PREVIEW: #1: Issuance will kick off for the week tomorrow with
GBP3.25bln of the 0.125% Jan-26 gilt on offer.
- This will be the third auction of the gilt following its launch last month.
The gilt continues to trade at a decent discount to the 0.625% Jun-25 gilt,
around 5.2bp at the time of writing after trading in a 3.5-5.5bp discount range
since launch. The last auction of this gilt saw less demand than the launch with
the bid-to-offer dropping to 2.28x from 2.72x and the tail widening from 0.2bp
to 0.4bp. We note that the previous auction of this gilt was the first following
the BOE's announcement that it would slow gilt purchases. Despite only being
eligible for BOE purchases since the second auction due to size constraints,
around 14% of the volume in issue is currently owned by the central bank. This
gilt is due to be sold twice more in August as the DMO builds it up as the new
five-year benchmark.
RESULTS: Results will be announced shortly after the auction closes at 10:00BST
with a further GBP812.5mln available to successful bidders via the PAOF.

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